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GlobalServicesMedia.com: The New Year That Took Jobs Away

Royal Dutch Shell announced that the company is going to outsource more than 3,000 IT jobs to reduce its operational costs, and hoped to save nearly $850 million per annum

Friday, January 25, 2008 
By Imrana Khan 

It was the first week of this New Year and as many of us strutted to our offices with a hopeful glint in our eyes to make this year a great success, there were a few thousands for whom the year didn’t augur well. Royal Dutch Shell, the world’s second largest oil company headquartered in the Netherlands and the U.K., announced that the company is going to outsource more than 3,000 IT jobs to reduce its operational costs, and hoped to save nearly $850 million per annum.

When contacted, the company didn’t respond to us. The industry speculates that the company will outsource under a deal that’s expected to be inked sometime in 2008.

While Shell chose to play the event down, the trade union Amicus decided to retaliate. Amicus is the largest manufacturing union in the U.K. When Shell is about to choose its partner — most likely one amongst AT&T, EDS and T-Systems, as per media guesses — Amicus has threatened the company with legal action.

The union is also asking the company to reinstate a company redundancy package, a  type of compensation paid one-time or monthly along with social security payments, worth up to £200,000 (about $395,152) per employee. According to media sources, Shell had revised down this amount to a fourth at £50,000 (about $98,794.50) per employee under an agreement in mid-2007.

As offshoring still continues to provide costs benefits and rising inflation is hitting the European economies hard, many companies are fast making public their plans to offshore their IT staff redundancies. In 2007, one of the Big Six service providers CSC also announced that it is shifting more U.K. jobs offshore in an effort to control costs. Reportedly, IBM too had also disclosed similar intentions of bringing in some IT redundancies in early 2007. In the same year, the U.K.-based law firm CMS Cameron McKenna declared to lay off half of its IT staff. However, this did not create much stir because of the rather thin IT department that the company chose to lay off from.  

http://www.globalservicesmedia.com/Content/general200801243651.asp

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